ISS (ISS) Q1 2025 TU earnings summary

Executive summary

• Q1 2025 delivered 4.3% organic growth, mainly from price increases and above-base activities, with revenue reaching DKK 20.9 billion and customer retention at 94%.

• Strategic focus on workplace experience, customer engagement, and refreshed priorities is driving growth and differentiation.

• Leaner executive management structure and organizational changes are accelerating execution and decision-making.

• Four new contracts above DKK 100 million secured, with several key account extensions and a 94% retention rate.

• Business model remains robust and resilient through economic cycles.

Financial highlights

• Group revenue rose to DKK 20.9 billion in Q1 2025, a 4.2% increase year-over-year, with organic growth at 4.3% mainly from price increases and above-base activity.

• Volume growth contributed 0.5%, while net new contract wins had a negative impact of just under 2%, mainly due to deliberate exits in the Americas.

• Projects and above-base work accounted for 15% of revenue, growing organically by 7.9%.

• Free cash flow expected to be negative in H1 but full-year guidance is above DKK 2.4 billion, or above DKK 3 billion if DTAG payment is received.

• Dividend of DKK 575 million paid and DKK 575 million in shares repurchased under a DKK 2.5 billion buyback program, with a 10% payout yield.

Outlook and guidance

• 2025 guidance reaffirmed: organic growth of 4–6%, operating margin above 5%, and free cash flow above DKK 2.4 billion.

• Growth is expected to be back-end loaded, with price increases, especially in Turkey, as the main driver.

• Underlying free cash flow expected above DKK 2.6 billion (cash conversion above 60%).

• If payments withheld by Deutsche Telekom are received, reported free cash flow could exceed DKK 3.0 billion.

• Acquisitions/divestments to add ~0.5% to revenue; FX expected to reduce revenue by 2–3%.